General Housewares Corp. v. National Surety Corp.
| Decision Date | 28 December 2000 |
| Docket Number | No. 49A04-9906-CV-282.,49A04-9906-CV-282. |
| Citation | 741 N.E.2d 408 |
| Parties | GENERAL HOUSEWARES CORP. and Chicago Cutlery, Inc., Appellants, v. NATIONAL SURETY CORPORATION, Appellee. |
| Court | Indiana Appellate Court |
George M. Plews, Jeffrey D. Claflin, Thomas A. John, Indianapolis, Indiana, Koorosh Talieh, Howrey & Simon, Washington, D.C., Attorneys for Appellants.
Thomas W. Murphy, Caron, Constants & Wilson, Chicago, Illinois, Bruce L. Kamplain, Raymond L. Faust, Norris, Choplin & Schroeder, LLP, Indianapolis, Indiana, Attorneys for Appellee National Surety Corporation.
Appellants, General Housewares Corporation and its wholly owned subsidiary, Chicago Cutlery, Inc., (collectively "Housewares"), challenge the trial court's entry of summary judgment in favor of National Surety Corporation (National).
We reverse and remand.
The facts relevant to this appeal reveal that Housewares manufactured cookware and precision tools at four locations: Terre Haute, Indiana, Sidney, Ohio, Lexington, Kentucky, and Antrim, New Hampshire. Housewares purchased three comprehensive general liability (CGL) insurance policies from National. The first of these policies, number S 64 DXX 80589089, provided coverage from March 1, 1994 through March 1, 1995. The policies numbered S 64 DXX 80614056 and XSC-000-8231-4808 provided coverage from March 1, 1995 through March 1, 1996.
Housewares' largest manufacturing plant is located in Terre Haute, Indiana. During the time relevant to this appeal, Housewares manufactured enamel-coated cookware at the Terre Haute facility. During an inspection of the site, the Indiana Department of Environmental Management (IDEM) took samples of sludge that had formed as a result of "wet dipping" the cookware in enamel and determined that the samples contained unacceptable levels of barium and cadmium. As a result, IDEM sent Housewares a "Notice of Violation" on February 9, 1989. In September 1989, Housewares entered into an Agreed Order wherein it agreed to an extensive cleanup of the site and to pay IDEM a fine of $36,339. IDEM's commissioner approved the agreement on January 19, 1990. On November 24, 1992, Housewares submitted its first proposed closure plan to IDEM. After negotiations, IDEM finally accepted a revised closure plan on September 26, 1994. Housewares continued to spend funds for monitoring and cleanup of the site up to the time of this appeal. Although Housewares submitted a closure certification report to IDEM on November 27, 1995, IDEM issued a deficiency notice on March 14, 1996. At the time of this appeal, IDEM still had not certified closure as to the site.
Housewares also owned and operated a manufacturing facility in Sidney, Ohio. On December 5, 1990, Housewares notified the Ohio Environmental Protection Agency (Ohio EPA) of the possible disposal of an unknown amount of sludge, which may have contained lead, at the Sidney foundry and landfill. On February 19, 1991, the Ohio EPA inspected the site. Thereafter, on March 20, 1991, the Ohio EPA sent Housewares a letter stating that Housewares had unlawfully disposed of hazardous waste at the Sidney site. The letter listed fourteen separate violations and advised Housewares to submit a closure plan. Housewares responded by denying that it had violated any regulations. After further investigation by the Ohio EPA, Housewares entered into a final order in February 1993 requiring Housewares to close the contaminated site, determine the lead concentrations levels, submit a closure plan, and pay a fine of $30,000.
On March 14, 1994, Housewares submitted its closure plan to the Ohio EPA, which the Ohio EPA approved on September 29, 1994. On August 19, 1996, Housewares submitted a closure certification report, noting that the cleanup activities at the site had been completed on June 21, 1996.
Housewares also leased property located in Lexington, Kentucky from the Bekem Partnership. Housewares sublet this property to Sam Blount, who operated a furniture manufacturing plant. This manufacturing plant generated waste products containing unacceptable levels of cadmium, chromium, and lead. On January 25, 1988, the Kentucky Natural Resources and Environmental Protection Cabinet (KEPC) filed an administrative complaint with regard to the Lexington site and named Housewares as a defendant. Despite denying liability in the matter, Housewares, the Bekem Partnership, and KEPC entered into an agreed order on December 8, 1992. In this order, Housewares and Bekem agreed to remove an underground storage tank from the site. After the removal of the storage tank, samples were taken from the pit. These samples indicated the presence of volatile compounds, and the Kentucky Division of Waste Management required further investigation to determine the extent of the contamination. Thereafter, Housewares filed a motion to set aside the agreement, claiming unfairness in the process since the agreed order had been entered. This motion was denied on January 26, 1996.
The Bekem Partnership continued to spend considerable funds in remediating the Lexington site, and attempted to have Housewares pay for one-half of the expenses. Although it maintains it is not liable for any of these costs, Housewares was negotiating with the Bekem Partnership to settle the matter at the time of this appeal.
On December 29, 1986, Housewares bought a facility located in Antrim, New Hampshire from Strombeck Manufacturing Company. Strombeck had purchased the facility from the Goodell Company, which had owned the site from 1875 to 1982. Housewares manufactured knives at the site, but ceased using the site in 1989.
On May 18, 1993, the United States Environmental Protection Agency (EPA) advised Housewares that, in response to a citizen complaint, the Antrim site had been placed on the EPA's inventory of known or potential hazardous waste disposal areas. On July 19, 1993, the EPA, pursuant to the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA), notified Housewares that it was a potentially responsible party (PRP) with regard to the Antrim site. The letter read in pertinent part:
Record at 328-329 (original emphasis).
On July 27, 1993, Housewares sent a letter to the EPA agreeing to voluntarily remedy the situation as per the PRP notice. The next day, on July 28, 1993, Housewares began sampling, analyzing, and disposing of the contents of containers at the site. On August 17, 1993, the EPA informed Housewares that soil samples taken from the Antrim site contained unacceptable levels of hazardous materials and indicated that removal of the contaminated soil would be necessary. The letter stated that the cleanup "must be performed pursuant to an administrative order." Record at 343. After a meeting between the EPA, the New Hampshire Department of Environmental Services (DES), and Housewares, the EPA on October 1, 1993, formally delegated to the DES the responsibility of overseeing the cleanup efforts at the Antrim site.
On October 8, 1993, Housewares filed a complaint in the United States District Court for the District of New Hampshire against David Hurlin and Peter Boorum, who were also PRPs with regard to the Antrim site. Housewares sought contribution and indemnification pursuant to CERCLA, New Hampshire statute, and common law for the expenses it had incurred as a result of the remediation efforts.
On December 2, 1993, the DES sent an "Environmental Assessment" to Housewares which outlined certain areas of concern which needed further investigation. This assessment letter noted that state statutes and regulations impose strict liability for costs relating to the remediation of a contaminated site upon any party that directly or indirectly owns or controls a facility where hazardous wastes have been generated or improperly disposed. The DES also advised Housewares that it was responsible for any costs incurred as a result of the cleanup, and would have to repay the EPA's past costs as well.
On October 31, 1994, the federal district court denied a motion for summary judgment which had been submitted by defendant David Hurlin. In its order, the District Court noted that Housewares "admits its liability under CERCLA" with regard to the Antrim site. Record at 398. The DES finally approved Housewares' cleanup plan on August 11, 1994. On July 21, 1995, the DES approved a remedial scope of work plan submitted by Housewares, and directed Housewares to commence cleanup activities. On January 16, 1996, Housewares submitted a report of its removal activities. Finally, on December 10, 1996, the DES informed Housewares that the Antrim site had been remediated with regard to exterior heavy metal contaminated residues and soils, interior waste residues, and asbestos. However, the DES required Housewares to document any lead contamination, limit further use of the site, and perform more groundwater sampling.
On June 12, 1997, Housewares brought an action for declaratory relief, breach of contract, and damages against several insurance companies which had issued CGL policies to Housewares. National was named as a defendant in this action. On October 16, 1998, National filed a motion for summary judgment asserting the "known loss" defense. Housewares...
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